I hereby give My Sanction to the Imperial Ordinance concerning the Restriction of Securities Holdings etc. by Companies, under the Imperial Ordinance No. 542 of 1945, regarding the Order to be issued in consequence of the Acceptance of the Potsdam Declaration, and cause the same to be promulgated.
Signed: HIROHITO, Seal of the Emperor
This twenty-second day of the eleventh month of the twenty-first year of Showa (November 22, 1946)
Countersigned: Prime Minister YOSHIDA Shigeru
Minister of Justice KIMURA Tokutaro
Minister of Commerce and Industry HOSHIJIMA Niro
Minister of Finance ISHIBASHI Tanzan
Imperial Ordinance No. 567
Article 1. "Designated companies" as stipulated in this Imperial Ordinance shall be such designated companies as prescribed in Article 1-(2) of Imperial Ordinance No. 657 of 1945.
"Subsidiary companies" as stipulated in this Imperial Ordinance shall be such companies other than designated companies one tenth or more of whose amount of capital (the definition of which shall be total partnership shares, total capital stock, aggregate sum of total partnership shares and total capital stock, or total amount of funds; hereinafter the same) is held by a designated company in equivalent amount of stocks (including partnership shares; hereinafter the same for this Article, Articles 2 to 5 inclusive, Articles 8, 9, 19 and 20).
"Affiliated companies" as stipulated in this Imperial Ordinance shall be such companies other than designated companies and subsidiary companies that come under any of the following items:
1. A company one tenth or more of whose amount of capital is held by a subsidiary company in equivalent amount of stocks;
2. A company one tenth or more of whose amount of capital is held by two or more companies of the same chain of capital in equivalent amount of stocks, the aggregate sum of stocks held by the said companies to be taken for such determination;
Companies of the same chain of capital as provided for by the provisions of the preceding paragraph shall be the under-mentioned companies:
a) A designated company as prescribed in item 1, b) A company one tenth or more of whose amount of capital is held by the designated company mentioned in sub-item (a) in equivalent amount of stocks,
c) In case the company mentioned in sub-item (b) is a designated company, a company one tenth or more of whose amount of capital is held by the said designated company in equivalent of stocks. 3.
A company one tenth or more of whose amount of paid-up partnership shares, amount of paid-up capital stock, or aggregate amount of paid-up partnership shares and paid-up capital stock (hereinafter to be called paid-up capital) is held by a designated company or a subsidiary company in equivalent amount of debentures or aggregate amount of claims in form of loans (hereinafter to be called debentures etc.) With regard to the calculation of the amount equivalent to one tenth or more of the capital or paid-up capital as provided for by the preceding two paragraphs, the amount of stocks or debentures etc. acquired after the day of the enforcement of this Imperial Ordinance by a company that comes under any of the under-mentioned items shall not be included in the said calculation:
2.
Companies whose business is the underwriting or handling of public subscription of securities 6.
Companies whose business is buying and selling of securities or acting as an intermediary for the same without recourse to the securities exchange. With regard to the calculation of the amount of holdings of stocks or debentures etc. as provided for by paragraphs 2 and 3, the amount of stocks or debentures etc. held by any of the under-mentioned items shall not be included in the said calculation:
1. Claims in form of loans actually held by banks on the day of the enforcement of this Imperial Ordinance;
2.
Stocks or debentures accepted for underwriting by those coming under item 5 of the preceding paragraph previous to the day of the enforcement of this Imperial Ordinance, and disposed of within ninety (90) days of the day of the enforcement of this Imperial Ordinance; 3.
Stocks or debentures actually held by those coming under item 6 of the preceding paragraph on the day of the enforcement of this Imperial Ordinance and disposed of within sixty days of the day of the enforcement of this Imperial Ordinance. In case a trust company (including banks undertaking trust business) holds or acquires stocks or debentures through acceptance of the trust of securities which provides that the trustor shall be the beneficiary, the trustor shall be deemed as holding the said stocks or debentures and the provisions of this Imperial Ordinance shall be applied accordingly.
With regard to stocks and debentures etc. which have been transferred to the Holding Company Liquidation Commission by a holding company (referring to a company designated in accordance with the provisions of Article 1 of the Holding Company Liquidation Commission Ordinance; hereinafter the same), such stocks and debentures etc. shall be deemed as held by the holding company formerly in possession of the said stocks or debentures etc., and until such time as when they are disposed of by the Holding Company Liquidation Commission, the provisions of this Imperial Ordinance shall be applied accordingly. Holding or acquisition of stocks or debentures as stipulated in paragraph 2 to the preceding paragraph inclusive, shall mean such a case whereof the registration has been made of the stockholder or debenture-holder of the said stocks or debentures in the stockholders registration book or the debenture-holders registration book of the company issuing the said stocks or debentures.
A designated company, a subsidiary company, or an affiliated company shall not acquire stocks or debentures etc. of another company with the exception of such a case coming under any of the under-mentioned items:
In case of acquisition of stocks or debentures etc. by a company coming under any one of the items of paragraph 4 of the preceding Article, provided that acquisition of stocks of a company of the same chain of capital as provided for by item 2 of paragraph 2 of the preceding Article by the said company is excluded; 2.
In case of acquisition of stocks or debentures etc. of a company designated by ordinance or order based upon the Temporary Adjustment of Demand and Supply of Commodities Law and of other companies to be stipulated by Imperial Ordinance; 3.
In case of acquisition of stocks or debentures etc. in accordance with the provisions of the final reorganization plan as provided for by the Enterprise Reconstruction and Reorganization Law; 4.
In case a company which comes under a trustor of securities in accordance with the provisions of paragraph 6 of Article 1 cancels the trust contract for the purpose of disposing stocks in accordance with the provisions of this Imperial Ordinance. Article 3.
A designated company, a subsidiary company, or an affiliated company shall not have the officers (such persons as directors, auditors, and others who are in charge of the company's business as an organ; hereinafter the same) or employees (such persons other than officers who are continually concerned with the company's business; hereinafter the same) of the said company, or any other persons acquire for its account stocks or debentures etc. of another company. Provided that the foregoing provision shall not apply to such a case when an officer or an employee of the said company, or any other person who corresponds to a trustor of securities in accordance with the provisions of paragraph 6 of Article 1 cancels the trust contract for the purpose of disposing stocks in accordance with the provisions of this Imperial Ordinance. Article 4.
In case a designated company actually in existence at the time of the enforcement of this Imperial Ordinance or a company that becomes a subsidiary company or an affiliated company of the said designated company at that time, holds stocks of another company at the time of the enforcement of this Imperial Ordinance, the said company shall draw up a plan for the disposal of the said stocks (hereinafter to be called the plan for disposal of stocks) in accordance with separate Cabinet Ordinance and shall submit the said plan to the Holding Company Liquidation Commission within a limit of time to be stipulated by Cabinet Ordinance and receive its approval. The provisions of the preceding paragraph shall not apply to such stocks as coming under any of the following items:
1. Stocks acquired by a company as provided for by the preceding paragraph (excluding designated companies) previous to December 8, 1945;
2.
Stocks acquired by a company as provided for by the preceding paragraph coming under the items of paragraph 4 of Article 1 (excluding such stocks of companies of the same chain of capital as provided for by item 2 of paragraph 3 of Article 1); 3.
Stocks held by a holding company; 4.
Stocks issued by a company stipulated by item 2 of Article 2; 5.
Stocks of a company whose head office is outside of Japan Proper. A company (excluding designated companies) stipulated by the provisions of paragraph 1 of this Article shall not dispose of such stocks as provided for by the preceding paragraph until such approval of the plan for disposal of stocks as provided for by provisions of paragraph 1 is obtained. Provided that the foregoing shall not apply to such a case wherefor an order, permission, approval or recognition has been made in accordance with other laws or ordinances.
A company stipulated by the provisions of paragraph 1 of this Article shall dispose of the said stocks in accordance with the provisions of the plan for disposal of stocks, when approval of the said plan for disposal of stocks is received in accordance with the provisions of the afore-mentioned paragraph. A company stipulated by the provisions of paragraph 1 shall delegate by proxy the execution of voting rights of stocks which are required to be disposed of to the Holding Company Liquidation Commission within one month of the day of the enforcement of this Imperial Ordinance.
The Holding Company Liquidation Commission shall accept the said proxy when such delegation is made pursuant to the provisions of the preceding paragraph.
The disposal of stocks as provided for by paragraph 4 and the delegation by proxy of the execution of voting rights may be carried out notwithstanding provisions of other laws or ordinances, articles of incorporation, or existing contracts.
With regard to the proxy made in accordance with the provisions of paragraph 5, necessary matters shall be provided for by Cabinet Ordinance with the exception of those coming under the preceding three paragraphs.
In case a company which is required to dispose of stocks in accordance with the provisions of paragraph 1 and which is a trustor of entrusted securities in accordance with the provisions of paragraph 6, of Article 1 proposes to cancel the trust contract for the purpose of disposing the said stocks or for the purpose of delegation by proxy of the execution of the voting rights, the trustee shall accept the said proposal.
In case the officers or employees of a company stipulated in paragraph 1 of the preceding Article, or any other person holds for the account of the said company stocks of another company at the time of the enforcement of this Imperial Ordinance, a plan for disposal of stocks shall be drawn up in accordance with the provisions of Cabinet Ordinance and it shall be submitted to the Holding Company Liquidation Commission for its approval within a period of time to be stipulated by Cabinet Ordinance.
The provisions of the preceding paragraph shall not be applied to such a case coming under any of the following items:
1. Stocks acquired previous to December 8, 1945,
2.
Stocks coming under the provisions of item 3 or 5 of paragraph 2 of the preceding Article. The provisions of paragraphs 3 to 9 inclusive of the preceding Article shall be applied mutatis mutandis to such a case as coming under paragraph 1.
Article 6. With regard to such stocks that require disposal in accordance with the provisions of the preceding two Articles, with the exception of such stocks as coming under item 1 or 2 of paragraph 1 of Article 7, the said stocks shall be first offered to such persons as coming under the under-mentioned items by the under-mentioned order in accordance with the provisions of separate Cabinet Ordinance:
Employees of the company issuing the said stocks, 2.
Individuals residing in the places of the head office, branch offices, and other offices and factories of the company issuing the said stocks. The provisions of the preceding paragraph shall not be applied to such cases when the amount of stock value of such stocks whose disposal is required in accordance with the provisions of the preceding two paragraphs and are held by those stipulated by paragraph 1 of Article 4 or paragraph 1 of the preceding Article is less than one tenth of the amount of capital of the company issuing the said stock (in case the capital of the company issuing the stock is more than five million yen, it shall be five hundred thousand yen and in case the capital of the company issuing the stock is less than two million yen it shall be two hundred thousand yen).
Article 7. The under-mentioned matters shall be written in the plan for disposal of stocks with regard to such stocks that require disposal in accordance with the provisions of Articles 4 and 5:
With regard to stocks that are firmly decided to be purchased and written off by the company issuing the stock in accordance with Cabinet Ordinance, the name of the said company issuing the stock and the number of stocks; 2.
In case the amalgamation of the company holding the said stocks and the company issuing the stock is firmly decided in accordance with Cabinet Ordinance, the name of the said company issuing the stock and the number of stocks; 3.
With regard to stocks that are to be transferred to the employees of the company issuing the said stocks in accordance with the provisions of item 1 of paragraph 1 of the preceding Article, the number of stocks and the name of the employee; 4.
With regard to stocks that are to be transferred to individuals residing in places of the head office, branch offices, and other offices and factories of the company issuing the said stocks, the number of stocks and the name of the receiver; 5.
With regard to such stocks other than those mentioned in the preceding items, the proposed plan for transfer and other necessary matters. The price for transfer of the stocks shall be decided in the plan in accordance with the provisions of Cabinet Ordinance and the said price shall be written in the said plan.
Article 8. With regard to the plan for disposal of stocks submitted in accordance with the provisions of Article 4 or 5, the Holding Company Liquidation Commission shall withhold its approval when it is considered that a false statement has been made or when the plan givien in the plan for disposal of stocks violates the provisions of this Imperial Ordinance or the provisions of any ordinances, orders, or regulations issued in accordance with the provisions of this Imperial Ordinance. In such a case as stipulated above, the Holding Company Liquidation Commission shall direct the revision of the said plan for disposal of stocks.
The same as the foregoing paragraph shall apply to such a case as when the Holding Company Liquidation Commission considers that the receiver of stocks as stated in the plan for disposal of stocks is acting on behalf of another person.
The Holding Company Liquidation Commission shall give approval when the plan for disposal of stocks is submitted with the exception of such a case as provided for by the provisions of the preceding two paragraphs. Necessary matters in connection with the approval of the plan for disposal of stocks in addition to the provisions of the preceding three paragraphs shall be provided for by Cabinet Ordinance.
Stocks as provided for by Article 4 or 5 but excluding those coming under item 1 or 2 of paragraph 1 of Article 7 shall not be transferred to judicial persons. Provided that the foregoing shall not apply to such a case provided for by item 1 of Article 2.
In executing the disposal of stocks in accordance with the provisions of Article 4 or 5, the amount of value of stock that a person may acquire shall not exceed whichever is higher of the following two: one-hundredth of the capital of the company issuing the stock or fifty thousand yen, Provided that the above shall not apply to transfer of stock to a company coming under the items of paragraph 4 of Article 1 or to such a case coming under item 1 or 2 of paragraph 1 of Article 7.
Article 10. In case, in accordance with the provisions of the plan for disposal of stocks which has been approved by the Holding Company Liquidation Commission, a person as provided for by item 3 of paragraph 1 of Article 7 applies for loan of necessary funds in order to acquire the said stocks to a financial institution as provided for by Cabinet Ordinance, the said financial institution shall comply with the said application in accordance with the provisions of Cabinet Ordinance or Order.
Positions as officers and employees of a designated company, a subsidiary company, or an affiliated company shall not be held concurrently with a position as an officer or an employee of another company with the exception of such a case coming under one of the following items: 1.
In case of becoming concurrently an officer of a company stipulated in paragraph 2 of Article 2; 2.
In case of becoming concurrently an officer of a company in accordance with the provisions of the final reorganization plan of the Enterprise Reconstruction and Reorganization Law; 3.
In case of becoming concurrently an officer of a company which is in danger of becoming insolvent or whose liabilities may exceed the assets for a designated company, a subsidiary company, or an affiliated company that is a stockholder or a claim holder of the said company. Article 12.
Persons actually coming under one of the under-mentioned items at the time of the enforcement of this Imperial Ordinance shall resign from all positions except any one position within one month of the day of the enforcement of this Imperial Ordinance with the exception of such a case stipulated in item 1 or 3 of the preceding Article: 1.
A person who is concurrently an officer of a designated company and another company other than the said designated company; 2.
A person who is concurrently an officer of a designated company and an employee of another company other than the said designated company; 3.
A person who is concurrently an officer of a subsidiary company or an affiliated company and an officer of a non-designated company; 4.
A person who is concurrently an employee of a subsidiary company or an affiliated company and an officer of a non-designated company. The provisions of items 3 and 4 of the preceding paragraph shall be applied to only such positions of those provided for by the said items which were assumed after December 8, 1945.
In case, as a result of application of the provisions of items 3 and 4 of paragraph 1 of this Article, positions as an officer or an employee of two or more companies becomes possible, the foregoing shall not prevent the application of the provisions of Article 14. Article 13.
A designated company shall not make a contract with any other company than those concerned, with respect to the business or operations of the said designated company, when the contents of which contract restricts free competition in production, sales, distribution, or trade of goods, and shall not execute any other action which restricts free competition in production or trade. Provided that the foregoing shall not apply to such a case wherefor the order, permission, approval, or recognition has been made in accordance with the provisions of other laws or ordinances.
A designated company, a subsidiary company, or an affiliated company shall not make, with a non-designated company, a contract that provides for previous approval on the part of a designated company, a subsidiary company, or an affiliated company with regard to the accounting statements of the said non-designated company or the execution of its business, and other contracts whose contents provide for the control of the business of the said non-designated company, and shall not execute any action which shall control the business of the said non-designated company. The foregoing shall apply also to such cases as when the officers or employees of a designated company, a subsidiary company, or an affiliated company and other persons make a contract with a non-designated company when the contents of which provide for the control of the business of a non-designated company for the said designated company, subsidiary company, or an affiliated company, or execute any action which shall control the business of the said non-designated company. The provisions of the foregoing paragraph shall not apply to such a case wherefor the order, permission, approval, or recognition of the competent Minister has been made in accordance with the provisions of other laws or ordinances.
Article 15. Contracts actually in existence at the time of the enforcement of this Imperial Ordinance and in violation of the provisions of Article 12 and paragraph 1 of the preceding Article shall be null and void from that time.
The Prime Minister may order the submission of reports from companies or persons concerned in accordance with the provisions of Cabinet Ordinance when deemed necessary by him for the enforcement of this Imperial Ordinance. Article 17.
The provisions of paragraphs 4 and 5 of Article 1, Articles 4, 5, 12 and 15, shall apply mutatis mutandis to a company that becomes a designated company, a subsidiary company, or an affiliated company after the day of the enforcement of this Imperial Ordinance. In the above case the following changes in the wording of the provisions of this Imperial Ordinance shall be made: "At the time of the enforcement of this Imperial Ordinance" shall read "at the time it becomes a designated company, a subsidiary company, or an affiliated company";
"On the day of the enforcement of this Imperial Ordinance" shall read "on the day it becomes a designated company, a subsidiary company, or an affiliated company"; In item 4 of paragraph 2 of Article 4 "item 2 of Article 2" shall read "item 2 or 3 of Article 2";
In paragraph 1 of Article 12 "item 1 or 3 of the preceding Article" shall read "items 1 to 3 inclusive of the preceding Article." Article 18.
In each case of the under-mentioned violations, the representatives, proxies or agents, employees, and other persons in the service of a judicial person shall be sentenced to not more than three years of imprisonment or be fined not more than five thousand yen: 1.
In case of acquisition of stocks or debentures etc. of another company in violation of the provisions of Article 2 or 3; 2.
In case of failure to submit the plan for disposal of stocks in violation of the provisions of paragraph 1 of Article 4 (including application mutatis mutandis in Article 17); 3.
In case of disposal of stocks in violation of the provisions of paragraph 3 of Article 4 (including application mutatis mutandis in Article 17); 4.
In case of failure to delegate by proxy the execution of voting rights in violation of the provisions of paragraph 5 of Article 4 (including application mutatis mutandis in Article 17); 5.
In case of transfer of stocks in violation of the provisions of Article 9; 6.
In case of making a contract or other actions in violation of the provisions of Article 13 and the former part of paragraph 1 of Article 14. Article 19.
A person coming under one of the following items shall be sentenced to not more than three years of imprisonment or be fined not more than five thousand yen: 1.
A person who fails to submit the plan for disposal of stocks or debentures in violation of the provisions of paragraph 1 of Article 5 (including application mutatis mutandis in Article 17); 2.
A person who disposed of such stocks in violation of the provisions of paragraph 3 of Article 4 which are applied mutatis mutandis in accordance with the provisions of paragraph 3 of Article 5 (including application mutatis mutandis in Article 17); 3.
A person who failed to delegate by proxy the execution of voting rights in violation of the provisions of paragraph 5 of Article 4 which are applied mutatis mutandis in accordance with the provisions of paragraph 3 of Article 5 (including application mutatis mutandis in Article 17); 4.
A person who becomes an officer in violation of the provisions of Article 11; 5.
A person who fails to resign from a position held concurrently in violation of the provisions of Article 12. (including application mutatis mutandis in Article 17); 6.
A person who makes a contract in violation of the provisions of the latter part of paragraph 1 of Article 14. Article 20.
A person who fails to submit a report in accordance with the provisions of Article 16 or who makes a false report, shall be sentenced to not more than one year of imprisonment or be fined not more than three thousand yen. Article 21.
In case a representative of a judicial person, or a proxy or agent, a member of the staff, or other employees of a judicial person or a person acts in violation of the provisions of Article 18 or the preceding Article with regard to the business or operations of the said judicial person, or said person, not only shall the violator be punished but the fine penalties of each Article shall be imposed upon the said judicial person or said person. Article 22.
Necessary provisions of this Imperial Ordinance may be applied mutatis mutandis against judicial persons other than companies in accordance with the provisions of Cabinet Ordinance. In the above case, provisions applied mutatis mutandis among such provisions of Article 18 to the preceding Article inclusive shall be considered as a matter of course to also apply mutatis mutandis.
Supplementary Provisions:
The present Imperial Ordinance shall come into force as from the day of its promulgation.
Part of the Holding Company Liquidation Commission Ordinance shall be amended as follows:
Next to Art. 9, par. 1, item 4, shall be added the following two items: 5.
Receive the entrust of execution of voting rights, in accordance with the provisions of Art. 4, par. 6 of the Imperial Ordinance No. 567 of 1946 (including such case as applied to mutatis mutandis in accordance with the provisions of Art. 5, par. 3), and manage the affairs concerned. 6.
Give instruction for the change of the plan for disposal of stocks, in accordance with the provisions of Art. 8, par. 1 of the Imperial Ordinance No. 567 of 1946, or give approval to the plan for disposal of stocks, in accordance with the provisions of par. 3 of the same Article.
In Art. 9, par. 2, "specified in the preceding paragraph" shall read "specified in items 1 to 4 of the preceding paragraph." Art. 10-(2). In case the persons other than the Holding Companies entrust the Commission with the execution of voting rights regarding their own stocks or those which belong to their employees, the Commission may collect the fees provided for by it.
In Art. 17, next to "of Art. 1." shall be added "The same shall apply to the execution of the voting rights which are entrusted."